Benefits of 2-4-6 for businesses
Important changes that benefit businesses who pay in cheques
When you pay in a cheque these changes help provide clarity on:
- When your current or business account will start to earn interest on money paid in by cheque.
- When the balance on which overdraft interest is charged will be reduced, if your account is overdrawn.
- When you will be able to withdraw the money paid in by cheque from your current or business account.
- When money has safely cleared with no chance of it being reclaimed without your consent, unless you are knowing party to fraud.
Providing clarity
From 2007, changes known as 2-4-6 came into force. These have increased clarity and certainty when you pay in cheques to a bank or building society account.
These industry-wide changes set a maximum time limit of two, four and six working days for each of the stages after paying in a cheque to a current or basic bank account.
After paying in a cheque, you can be sure that at the end of six working days, the money is cleared, and you and your business are protected from any loss if the cheque is subsequently found to be fraudulent, unless you are a knowing party to fraud.
Maximum Times
The changes also set maximum times when customers start earning interest on money paid in and when it will be available for withdrawal. Banks and building societies still compete to offer services that beat these guaranteed time limits for interest and withdrawal.
If you have a business that accepts a large number of cheques you should make sure you have a company account best suited to your needs. Alternatively it may be advantageous to review other options for accepting payments from suppliers and customers, such as internet and phone payments or card payments.
Businesses which accept cheques with cheque guarantee cards are protected from losses against cheques being returned unpaid up to the limit on the card, provided they have followed the scheme's conditions of use.
We have produced a leaflet for consumers that explains the 2-4-6 changes:
Download: 2-4-6 leaflet for businesses (PDF 636kb)